It may be a tough real estate market, but that doesn't mean one investment company isn't going after a strategy not often seen in the Bull City: apartment-condo conversion.
That's the strategy that commercial real estate company M.L. James appears to be trying with a 1960s-era apartment complex on Leon St. across from Brodgen Middle School.
The company -- which in 2007 tackled a similarly-aged apartment conversion project in Carrboro, where The Flats now sell for nearly $200,000 for just over 800 sq. ft. -- is now trying the same thing in Durham, with units 50% larger at two-thirds the price.
It's an interesting idea for those who fret about the long-range plans for older apartment complexes, not all of which have adapted well with age. And at about $100 a square foot, it rates as being more affordable than most condo options in Durham, which have typically aimed at a higher price point per square foot.
But the big question will remain: in the present economy, will buyers be interested in two bedroom, two bath former apartments going for $125,000 -- even for units that have been given a nicely-modernized look inside?
The Leon St. area is chockablock with apartment complexes, from The Oaks and The Murcheson to the west to the Presidential Apartments to the south. And Leon has a fairly busy traffic load, serving as a cut-through between N. Duke St. and Broad St. and the North Pointe shopping complex where Costco, Kroger and Home Depot have set up shop.
While I-85 is adjacent to the general region, though, as the developer notes at their web site, it is possible to bike down to Ninth St. (presumably via Leon/Broad) and the location is minutes away from the heart of downtown -- with bus service provided along Leon to boot.
Chapel Hill-based ML James, the Chapel Hill-based commercial real estate company appearing as the listing party on the MLS record and which now has an office address at 1100 Leon, also owns the Advance Auto-helmed strip center at the corner of Roxboro and Club as well as The Electric Company shopping center across from NC State in Raleigh.
Their Leon Street LLC acquired the site from Lucas, Cochran and Grabus Investments Ltd. almost exactly one year ago in February 2008 for $1.49 million.
And what does $1.49 million buy? 28 apartment units, in two buildings cleaved off of the Murcheson complex.
The design of which seem to provide a thoughtful way to get into a condo conversion. Eight of the twelve units in the first building have been demoed and rehabbed to a shell level; one of them sits as the model unit, with fixtures and upfit ready as demand appears for the next seven. Meantime, the remaining twenty units in the complex continue as rentals -- for now. (Hey, it's a lot better to do a condo conversion if you have the property continuing to help contribute towards its debt service in the process.)
The interior of the model unit shown on the project's web site depicts the kind of upgrades one might expect -- hardwood floors, updated bathrooms and bath fixtures, granite countertops, stainless steel appliances and the like. New windows and doors and new heating and cooling have also been installed.
During a look inside the units over the weekend, it was nice to see some features that went above what might be expected at the price level, from bathtub tile above full tubs (instead of simply installing fiberglass/plastic all-in-ones) to a smartly-relocated washer/dryers to solid built-ins in the walk-in master closet.
It's not hard to see this as an affordable option for homeownership that's close to shopping, schools, parks and downtown. But will buyers be interested?
ML James will have itself twenty-eight units' worth of chances to find out.
To find out more, stop by one of the condo project's open houses, on site from 11am to 3pm each Wednesday and Sunday.
Hey Kevin, maybe it's just early-morning eyes, but I can't see the link on this page to the 1100 Leon website. Clicking the images you grabbed doesn't do the trick . . .
Posted by: Ross Grady | February 16, 2009 at 08:41 AM
We are crossing all our fingers on this one. If this is sucessful, we can predict that most of these out-dated apt complexes, namely the one's in downtown can become trendy once again. We really hope they don't overprice like the Trinity Lofts; greed and stupidity are all the same thing. 125,000 does sound reasonable for a two bedroom.
Posted by: Shady Durham | February 16, 2009 at 09:29 AM
I sure hope this succeeds. I think its a great idea.
Posted by: Carol | February 16, 2009 at 10:27 AM
I'm of the mindset that "if you build it, they will come." Investing in Durham is a risk well worth taking even in a down economy.
Posted by: aburtch | February 16, 2009 at 01:08 PM
Leon's getting larger!
http://www.youtube.com/watch?v=Yo_dnfOaEX0
Sorry, that's all I got.
Posted by: fullsteam | February 16, 2009 at 01:51 PM
This link gets you a whole series of photos, but I'll be honest with you: other than the kitchen area, the rest of the photos make the apartments look okay, but not all that different from a brand new cheap apartment complex. i was hoping for an interior more on par with West Village! Of course, the price can't be beat. (Wrong side of I-85, though).
http://www.movoto.com/real-estate/homes-for-sale/NC/Durham/1100-Leon-St-413_1644312.htm
Posted by: BobtheBuilder | February 16, 2009 at 02:56 PM
the website is www.1100leon.com
Seems like a sweet deal.. (for that side of the I-85 which means nothing your still is Durham)
Posted by: baxter | March 14, 2009 at 03:07 PM